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A non-parametric decomposition of redistribution into vertical and horizontal components


Perrote Coste, Irene and Rodríguez Hernández, Juan Gabriel and Salas del Marmol, Rafael (2001) A non-parametric decomposition of redistribution into vertical and horizontal components. [ Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales; nº 07, 2001, ISSN: 2255-5471 ]

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We apply non-parametric methods to construct an index to measure horizontal inequity (HI). The index tackles the problem of arbitrary definition of similar individuals, and has important normative properties: HI is measured by the distance between the Lorenz curves of estimated and actual post-tax income distribution. This incorporates an ordinal view of HI. Moreover, the total effect of a tax system can be decomposed into welfare gain due to income redistribution free of HI and welfare loss due to HI. Indices such as in Aronson et al. (1994) and Lambert and Ramos (1997) can be seen as particular cases.

Item Type:Working Paper or Technical Report
Additional Information:

JEL Classification: H23, D63, D31 and C14.

Uncontrolled Keywords:Modelos econométricos, Vertical redistribution, Horizontal inequity, Social-welfare and nonparametric. estimation.
Subjects:Social sciences > Economics > Econometrics
Series Name:Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales
ID Code:6731

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Deposited On:30 Nov 2007
Last Modified:22 Oct 2015 07:31

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